The government should give £10,000 to every citizen under 55, a new report has suggested.
As reported by the BBC, the Royal Society for the encouragement of the Arts, Manufactures and Commerce (RSA) said paying £5,000 per year over two years could pave the way to everyone getting a basic state wage.
The RSA claim the move would encourage innovation, re-training and help people who have caring responsibilities to cope.
The payments would not be means tested but would require claimants to demonstrate that they intend to put the money to good use, according to the proposals.
The move is seen as a step towards a Universal Basic Income (UBI) which allows everyone to be paid a minimum sum regardless of whether or not they are in work.
The RSA believes that UBI would help people get into work, give them an opportunity to re-plan their lives and contribute to better health and wellbeing. Others, however, claim it would be a disincentive.
Anthony Painter, director of the RSA’s Action and Research Centre, said: “The simple fact is that too many households are highly vulnerable to a shock in a decade of disruption, with storm clouds on the horizon if automation, Brexit and an ageing population are mismanaged.
“Without a real change in our thinking, neither tweaks to the welfare state nor getting people into work alone, when the link between hard work and fair pay has broken, will help working people meet the challenges ahead.”
The report adds that the fund could help people on a number of levels, be they an entrepreneur needing the funds to turn an idea into reality, a low-skilled worker who could reduce their working hours to attain skills enabling career progression, or a carer requiring financial support in order to look after a loved one.
The fund would be built from public debt, levies on untaxed corporate assets and investments in long term infrastructure projects.
As the dividends would replace payments such as Child Benefit, Tax Credits and Jobseeker’s Allowance, the savings for the government could also be ploughed into the fund. The RSA puts the cost of the scheme at £14.5bn a year if it is fully subscribed to, and a total of £462bn over 13 years, more than half of which would be paid for by government savings.
Anyone receiving the “dividends” would not be able to claim any tax allowances, which the RSA believe would act as a deterrent to higher earners wanting to apply for the handout.
If you are struggling with debt, Money Advisor may be able to help. Find out how we can help you reduce your repayments and advise on a range of financial repayment options. Contact us today for expert, confidential advice with no obligation.View all Posts